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The Indian rupee weakened on Tuesday tracking a fall in its Asian peers amid persistent moderation in bets on aggressive rate cuts by the U.S. Federal Reserve.

The rupee was at 83.1225 against the U.S. dollar as of 10:00 a.m. IST, down 0.07% compared to its close at 83.0650 on Friday. Indian markets were shut on Monday due to a local public holiday.

The dollar index was last quoted lower at 103.21. While most Asian currencies edged lower, the offshore Chinese yuan was up nearly 0.3% on a report that China is weighing a rescue package for its plunging stock markets.

The Japanese yen was little changed after the Bank of Japan maintained its ultra-loose monetary policy in a closely watched decision on Tuesday.

The rupee is likely to hover between 83.05 and 83.20 on Tuesday, with routine dollar demand driving much of the price action, a foreign exchange trader at a state-run bank said.

A reassessment of rate cut expectations in the United States is also likely to limit near-term gains for Asian currencies. Strong U.S. economic data and pushback from Fed officials prompted investors to pare bets on aggressive rate cuts.

Investors are currently pricing in a 56.5% chance that the Fed will leave rates unchanged in March, up from only 19% as of Jan. 12.

Meanwhile, rupee forward premiums edged lower with the 1-year implied yield falling 1 basis point to 1.86%.

Over the medium term, "once 82.80 is taken out convincingly," then the rupee may stand to witness further appreciation, Amit Pabari, managing director at FX advisory firm CR Forex said.

Investors will also be keeping an eye on the European Central Bank's monetary policy decision due on Thursday and the closely watched U.S. personal consumption expenditure (PCE) inflation data due on Friday.